FamilyMart credits store upgrades for income lift

HISTORIC HIGH:Net income hit its highest level in the company’s history last year, and net profit topped NT$1 billion. The firm approved a dividend of NT$4.5 per share

By Amy Su / Staff reporter

Taiwan FamilyMart Co (全家便利商店) posted the highest net income in the company’s history last year, thanks to its strategy of store upgrades in Taiwan and reduced losses at its Chinese business, the company said.

FamilyMart, which operates 2,897 convenience stores in Taiwan, posted a net profit of NT$1.1 billion (US$36 million), or earnings per share of NT$4.91 last year, up 24.28 percent from net income of NT$881.14 million, or earnings per share of NT$3.95 per share, in 2012, the company said in a statement on Thursday.

The company’s board of directors approved a proposal to issue a cash dividend of NT$4.5 per share, higher than the cash dividend of NT$3.1 per share paid last year, a company filing to the stock exchange said.

RENOVATIONS

“The company’s efforts to renovate its outlets had a positive effect on sales and profitability last year,” the statement said.

The number of new-format FamilyMart outlets — which offer more seats with store sizes between 40 ping and 50 ping (132m2 to 165m2) — reached 1,476 as of the end of last year, accounting for more than half of its total stores, the statement said.

The move saw FamilyMart’s same-store revenue grow by 6 percent last year, helping the convenience store operator to increase its net income and offsetting rises in electricity bills and human resources costs, the statement said.

CHINESE BUSINESS

In addition, the company’s Chinese business improved last year after it shut some unprofitable stores, it added.

In the fourth quarter of last year, net income plunged 31 percent year-on-year to NT$246.33 million, or earnings per shares of NT$0.97, compared with a net profit of NT$354.74 million, or earnings per share of NT$1.04, in the same period of 2012, company statistics showed.

FamilyMart’s fourth-quarter net income last year was 10 percent lower than Yuanta Securities’ forecast and the market consensus, the brokerage said.

At an investors’ conference on Wednesday, FamilyMart — the nation’s second-largest convenience store operator — said it expected sales this year to grow by 7 percent, with net income to surge by a double-digit percentage, a Yuanta Securities report said.

FamilyMart attributed the expected growth to a rising contribution from its business operations in China, as well as revenue growth from high-margin products, such as ice cream, and its own-brand products.